Intel says new pricing policy will help partners

Intel will slash prices in August to compensate for its announcement last Friday that it will skip its November quarterly price cut on CPUs. The processor giant firmed up details of its shock decision, saying it will reduce some Pentium prices more than it had planned in order to compensate for the pre-Xmas omission.

The change of heart is claimed to be an aid to its resellers and OEM partners. "We responded to customers who felt it was disruptive to inventory and channel distribution planning to have a price cut at a key selling point in the year," said a UK spokeswoman. "We've decided to cut lower in August and hold those prices." She declined to say whether Intel will afterwards return to its strategy of quarterly cuts.

Some PC vendors expressed skepticism over Intel's claims. "It sounds like they're taking advantage of falling DRAM prices to keep systems cheap," said one vendor who asked for anonymity. Analysts said the move was also a sign that Intel was confident of an upbeat Xmas market, in the teeth of recent slowness in home market.

"It's price protection for their tier one [PC vendors]," said Richard Baker, AMD regional marketing manager for PC products. "Everyone says that the market is going to bottom out in Q3."